Without objection the chair is authorized today declare a recess of the committee at any time. This hearing is entitled an examination of facebook and its impact on the Financial Services and housing sectors. I now recognize myself for five minutes to give an Opening Statement. Today, were here to examine the impact of facebook on the Financial Services and housing sectors. Our sole witness is facebooks chairman and ceo, Mark Zuckerberg. Facebooks plans to create a Digital Currency, libra, and a digital wallet raise many concerns relating to privacy, trading risk, discrimination, opportunities for diverse owned financial firms, National Security, Monetary Policy, and the stability of the Global Financial system. I and other democrats have called for a moratorium on facebooks development of this Digital Currency, libra, and digital wallet until congress can examine the issues associated with a Big Tech Company developing these Digital Products and take action. As i have examined facebooks various problems ive come to the conclusion it would be beneficial for all if facebook concentrates on addressing its many deficiencies and failures before proceeding further on the libra project. Lets review the record. First on diversity and inclusion. Facebook has utterly failed. Facebooks executive ranks and workforce continue to be mostly white and male. Since reverend Jesse Jackson and the Rainbow Push Coalition called upon Silicon Valley companies to release its diversity statistics more than five years ago, the representation of africanamericans and hispanics has increased bide 2 . Facebook told us they have 0 managed by diverse firms. Unfair housing. Facebook has been sued by the National FairHousing Alliance for enabling advertisers to engage in discrimination on its advertising platforms. The u. S. Department of housing and urban development has also filed an official charge of discrimination against facebook for its advertising practices, including the companys own ad delivery algorithms which were found to have a discriminatory impact when advertisers did not target their audience in discriminatory ways chtd i understand that facebook has refused to cooperate with h. U. D. s fair housing investigation by refusing to provide relevant data. On competition and fairness, facebook is the subject of an antitrust investigation by the attorneys general of 47 states and the district of columbia. On protecting consumers, facebook was fined 5 billion by the federal trade commission for deceiving consumers and failing to keep their data private. On elections, facebook enabled the russian government to interfere with our election in 2016 with ads designed to pit americans against each other. Suppress the vote and boost trump. For example, facebook allowed a counterfeit black lives matter web page to operate with the goal of discouraging africanamericans from voting. Three years later, these activities are still continuing on facebook. We learned just this week that russia and iran are using the same tactics to meddle in our next election. Now on political speech. Last week, you announced that facebook would not be doing Fact Checking on political ads given anyone facebook labels a politician a platform to lie, mislead, and misinform the American People. Which will also allow facebook to sell more ads. The impact of this will be a massive Voter Suppression effort that will move at the speed of a clip. Your claim to promote freedom of speech does not ring true. 2. 7 Million People use your products, thats over a third of the worlds population. Thats huge. Thats so big its clear to me and to anyone who hears this list that perhaps you believe that youre above the law. It appears you aggressively increase the size of your company. And are willing to step on or over anyone, including your competitors, women, people of color, your own users and even our democracy to get what you want. All of these problems ive outlined and given the companys size and reach it should be clear while we have serious concerns about your plans to establish a Global Digital currency that would challenge the u. S. Dollar. In fact, you have opened up a serious discussion about whether facebook should be broken up. The chair now recognizes the Ranking Member of the committee, the gentlemen from North Carolina, mr. Mchenry for five minutes for an Opening Statement. Thank you, chairwoman waters, thank you mr. Zuckerberg for your appearance. Today is a trial on American Innovation. Theres a growing concern about the role that technology plays in our lives. Thats warranted. Thats necessary. Yes, technology has led to a greater prosperity. More freedom of expression. And the ability to transcend the limits of space and time to connect us with one another. Its a powerful tool. Powerful today for our society, developed here in the United States, gone global. But we know theres also a downside to all of this. The vitriol on social media is frightening. The going inequality between those who have access to the latest tech gadgets remain on the coasts. While folks living in Rural America are still trying to get the same connectivity necessary to compete in a global marketplace. Not to mention the anxiety of the age. Thats a deep cultural moment for us, not as politicians but as americans. That nervous feeling that you need to check your phone throughout the day. Thats something that is now a cultural occurrence for all of us, especially members of congress. Most of whom in this room are doing that right now. Theres a lot of anger out there. And now its being directed at the architects of the system. Thats why youre here, mr. Zuckerberg. Thats why youre here today. Youre one of the titans of what we call the digital age. Enormous amount of responsibility, an enormous weight based off the innovation youve wrought. Maybe its not about libra. Its not just about some housing ads, no. Maybe its not really even about facebook at all. Its that larger question. In fair or not fair, youre here today to answer for the digital age. But, of course, youre not americas first innovator and we hope youre not americas last. This is not the first time that america has faced difficult questions about technology. Sadly, throughout the history of innovation, a major theme is the exploitation of fear. Politicians enabled by special interests and a lack of understanding of new Technology Use fear to justify what is ultimately a power grab. New laws, new regulation, but ultimately old and tired ways of centralized power here in washington or other systems of government. Some of this has led in the past to comical results. We hope to avoid it now. Just as one example, there was a time when legislators pushed for what was then called red flag laws. Which required vehicles, socalled horseless carriages of that age to immediately stop on the side of the row and disassemble the automobile until equestrians or livestock was sufficiently pacified. Other times in history, the use of fear was not so funny. Our last hearing on libra, for example, was a moment when members of congress on this dias compared the technology, that technology of libra, to the terrorist attacks of september 11th. Will the gentleman yield . I have my own qualms will the gentleman yield . Time belongs to the gentleman from North Carolina. Thank you for taking the bait. Look, i have my qualms about facebook and libra. I do. And the shortcomings of big tech. There are many, yes, there are. But if history has taught us anything, its better to be on the side of American Innovation, competition and most importantly the freedom to build a Better Future for all of us. Progress is not preordained. And American Progress and american domination of free speech and global rights is not preordained. Let us not forget the wave of innovation is spreading across the world with or without us. So thats why i believe that American Innovation is on trial this day in this hearing. And the question is are we going to spend our time trying to devise ways for government planners to centralize and control as to who, when and how innovators can innovate . Or will we spend time contemplating and leading the way on the question of whether or not it will be American Innovation that leads the next century. Being led by American Values, the notion that we have of the rule of law and free speech rights and american driven jobs and innovation. Are we going to spend our time building a Brighter Future for americans or trying to tear each other apart . I yield back. Id like to welcome todays witnesses. Actually, we only have one. Mr. Mark zuckerberg. Chairman and chief executive officer of facebook. This is mr. Zuckerbergs first appearance before this committee, but i believe that mr. Zuckerberg needs no introduction. Mr. Zuckerberg, without objection, your statement will be made part of the record. Youll have five minutes to summarize your testimony. You have one minute remaining, a yellow light will appear. At that time id ask you to wrap up your testimony so we can be respectful of the Committee Members time. Mr. Zuckerberg, you are now recognized for five minutes to present your oral testimony. Thank you, chairwoman waters, Ranking Member mchenry and members of the committee. Thank you for the opportunity to testify today. As we sit here, there are more than a billion people around the world who dont have access to a bank account, but could through mobile phones if the right system existed. That includes more than 14 Million People here in the u. S. Being shut out of the Financial System has real consequences for peoples lives. Its often the most disadvantaged people who pay the highest price. People pay far too high a cost to send money home to their families abroad. The Current System is failing them. Financial industry is stagnant and there is no Digital Financial architecture to support the innovation that we need. I believe that this problem can be solved and libra can help. The idea behind libra is that sending money should be as easy and secure as sending a message. It will be a global Payment System fully backed by a reserve of cash and highly liquid assets. I believe that this is something that needs to get built. I get im not the ideal messenger for this right now. We faced a lot of issues over the past few years. Im sure there are lot of people that wish it were anyone but facebook that were helping to focus this. Theres a reason we care about this. Thats because facebook is about putting power in peoples hands. Our Services Already give people a voice to express what matters to them and to build businesses that create opportunity. Giving people control of their money is important, too. And a simple way to transfer money is empowering. Over the long term, this means more people that interact on our platforms. Thats good. Even if it doesnt, i think it could still help people everywhere. Before we move forward, there are important risks that need to be addressed. Questions about Financial Stability, fighting terrorism and more. Im here to discuss those risks and how we plan to address them. I hope we get a chance to talk about the risks of not innovating. While we debate these issues the rest of the world isnt waiting. China is waiting to launch a similar idea in the coming months. Libra will be backed by dollars and i believe it will extend americas leadership across the world. If america doesnt innovate, our Financial Leadership is not guaranteed. I actually dont know if libra is going to work. But i believe that its important to try new things. As long as were doing so responsibly. Thats what has made america successful and why our Tech Industry leads the world. We cowrote a white paper to start a conversation with regulators and government. Todays hearing is an important part of the process. What were discussing is too important for anyone to take on their own. We help tod form the Libra Association, an association of 21 companies who are working to give everyone access to financial tools. We dont control it, i want to be clear. Facebook will not be a part of launching the libra Payment System anywhere in the world, even outside the u. S. , until the u. S. Regulators approve. Last time i testified before congress, i talked about taking a broader view of our responsibility. And that includes making sure our services are used for good in preventing harm. I want to discuss that across other aspects of our work today as well. People shouldnt be discriminated against on any of our services. We have policies in place to prevent hate speech and remove harmful content. But discrimination can show up in how ads are targeted and shown to. Its part of the settlement with civil Rights Groups. We banned advertisers from using age, gender or zip codes to target housing, employment or Credit Opportunities. Its part of our commitment to prevent discrimination. I know we need more diverse perspectives in our country. Diversity leads to Better Services for our committee. Weve made diversity a priority in hiring and weve also made a commitment that within five years, more than 50 of our workforce will be women, people of color, and other underrepresented groups. Weve made some progress here. There are more people in color, women in technical and Business Leaders and underrepresented people at facebook now, but i know we still have a long way to go. Chairwoman waters, Ranking Member mchenry and members of the committee, this has been a challenging few years for facebook. I recognize that we play an Important Role in society and have unique responsibilities because of that. And i feel blessed to be in a position where we can make a difference in peoples lives. And for as long as im here, im committed to using our position to push for big ideas that i believe can help empower people. Thank you, and now im looking forward to answering your questions. Thank you very much. I now recognize myself for five minutes for questions. It is no secret that facebook allowed russia to undermine and divide our country through divisive online ads. The senates investigation discovered that africanamericans were targeted the most by russia, specifically in places where black lives matter groups were the most active. Despite all of your technicological expertise, russia and iran are at it again for the upcoming election. Last week you announced a new ad policy that gives politicians a license to lie so you can earn more money off the division i suppose. Facebook changes the rules when it can benefit itself. Last year, facebook banned all crypto currency ads on its platform because theyre frequently related to deceptive promotional practices. Seems fair. Then earlier this year, facebook rolled back the crypto currency ban for a Blockchain Company and announced its own crypto currency. Tell us what changed . How did crypto currency go from being misleading and deceptive last year and then becomes a means for Financial Inclusion this year . It seems to me that you shifted your stance because you realized you can use your size and your users data to dominate the crypto currency market. You change your policy when it benefits you. You reinstate a crypto currency ad because you had plans to start your own crypto currency. So this brings me back to your new policy on political speech. My question to you is, how does this new policy benefit you . Because it seems that a policy that allows politicians to lie, mislead, and deceive would also allow facebook to sell more ads to those politicians thus making your company more money. But you can tell me how does facebook benefit . Chairwoman, thanks for those questions. Id like to address all the things you mentioned in there. On elections, youre right that in 2016 we were on our back foot in terms of preventing russia from attempting to interfere in our elections. We spent a lot of the last few years Building Systems that are more sophisticated than any other company has at this point and frankly a lot of governments do. This monday we announced we tha proactively identified a network of fake russian accounts and a few networks of iranian fake accounts we proactively took down. Which certainly signals that these nation states are still attempting to interfere but i hope it will give us more confidence that our systems are able to identify and address these things. On your question about political ads. Look, from a business perspective, the very small percent of our business that is made up of little ads does not come anywhere close to justifying the controversy th